The Authorisations Process
The MFSA is the competent authority in Malta responsible for granting authorisation to persons seeking to carry out financial services activities. Authorisation is an important part of the overall supervisory framework.
The authorisation process of entities seeking to enter the financial services industry is a key function of the Malta Financial Services Authority in its gatekeeper role. The objective of the assessment of an application for authorisation is to ensure that criteria detailed under the respective financial services legislation are satisfied at authorisation stage and continue to be fulfilled on an ongoing basis.
Find out below (i) Who requires Authorisation (ii) Our Authorisation process (iii) Personal Questionnaire (iv) Corporate Questionnaire
Who needs an authorisation?
The Authorisation Unit is responsible for the processing of applications, changes in control and appointment of approved persons, requests for changes in documentation, waiver/exemption applications as well as passporting notifications under the relevant EU/EEA Directives.
(1/4) Who Needs an Authorisation?
An application to the MFSA must be made for authorisation to carry out any financial services activities.
Persons carrying out the following activities need a licence to operate
Each applicant seeking authorisation must meet the relevant prescribed criteria set out in respective legislation. In fulfilling its statutory obligation, the MFSA adopts a robust structured and risk based process aimed to ensure that only applicants that demonstrate compliance with respective regulatory framework are authorised.
Our Authorisation Process.
The applicant is invited to submit an application pack which should contain the complete set of required documents in accordance with the authorisation applied for.
(2/4) Our Authorisation Process
The MFSA’s authorisation process is typically initiated through a meeting with the applicants.
The scope is to facilitate our understanding of the strategy and business model being proposed and to explain our processes and requirements in relation to this proposal. This is the start of an interactive approach involving ongoing engagement with the applicant should the application materialise.
Application documentation supporting the business model will generally include the business plan, governance arrangements, financial projections as well as risk management policies, investment policies and outsourcing arrangements as applicable depending on the authorisation applied for.
In parallel, the due diligence process is commenced in respect of all involved parties who are in a position to effect the direction of the applicant, including key functionaries and direct and indirect qualifying shareholders, up to the ultimate beneficial owner.
Checks on the applicant’s competence and integrity are carried out with a view to ascertain that the applicant is able to carry out the proposed role within the ambit of proposed business model to an expected high standard. Fit and proper checks involve third party verification of personal information, exchange of information through close collaboration with foreign regulators and intelligence reports from specialized sources.
Personal Questionnaire.
The take up of positions which can influence the direction of an Entity or occupy certain positions of trust, is subject to prior regulatory approval. Approval is subject to a due diligence process by the MFSA to ensure that the Applicant meets the ‘fit and proper’ or suitability criteria and has the necessary qualities that will allow the individual to perform his/her responsibilities required in his/her position.
(3/4) The Personal Questionnaire
The MFSA only approves proposed Applicants when it is satisfied that they are suitable to hold the proposed role(s).
The suitability assessment is based on the following criteria:
- Competence (based on the qualification and experience of the Applicant)
- Reputation (based on the integrity and financial soundness)
- Conflicts of Interest and independence of mind
- Time Commitment
In order to conduct its suitability assessment, the MFSA requires Applicants to complete the online Personal Questionnaire by logging into LH Portal. Please keep the login details in a secure place as they may be needed for future use.
Before completing a Personal Questionnaire, Applicants are expected to read the Guidelines to the Personal Questionnaire and the Glossary. You can also refer to this PQ template for assistance.
Corporate Questionnaire
The Corporate Questionnaire shall be duly filled in by Qualifying Shareholders or Other Controllers (‘Qualifying Holder’) which have legal personality and are being proposed as an Involvement with an Applicant or Authorised Person.
(4/4) The Corporate Questionnaire
The MFSA only approves proposed Applicants when it is satisfied that they are suitable to hold the proposed role(s).
The proposed Qualifying Holder shall to the best of its knowledge, provide information, which is truthful, accurate and complete. The Qualifying Holder shall notify the MFSA immediately if the information provided changes in any material respect either prior to or subsequent to authorisation.
AX01 - Corporate Questionnaire ... click here to download
AX18 - Trusts and Fiduciaries Additional Questionnaire ... click here to download
Rule 4 of the MFSA Act outlines the MFSA’s Authorisation process, which is triggered when a prospective Applicant submits an intention to submit an Application for Authorisation.
Prospective Applicants should refer to Rule 4 to determine the applicable Authorisation Application Forms. For Applications which are not specified in the Rule, the respective Applications and supporting documentation as stipulated in the respective Regulatory Framework should be submitted.
Rule 4 of the MFSA Act has been issued in terms of Article 16(2)(a) of the MFSA Act and should be read in conjunction with any other Regulatory Framework administered by the Authority and/or in force in Malta, and any regulations and rules issued thereunder.
The MFSA’s Authorisations Portal
The MFSA is committed to providing a clear, open and transparent authorisation process while ensuring a rigorous assessment of the applicable regulatory standards.
The requested documentation is listed in the applicable application form for the specific category of licence or recognition in the Authorisations Portal below.
Banking
Credit and Financial
Institutions
Securities and Markets
Insurance, Pensions and Intermediaries
Trusts and CSP
Virtual Financial Assets
Banking – Credit and Financial Institutions
Credit institutions are entities licensed to operate under the Banking Act (Cap. 371 of the Laws of Malta). According to the Banking Act, a credit institution can undertake a number of activities which are specified in the Schedule to the same Act.
The business of banking is the taking of deposits of money from the public from retail customers for the purpose of employing, lending or investing such money.
Financial Institutions are entities licensed to operate under the Financial Institutions Act (Cap. 376 of the Laws of Malta) and means a person who regularly and habitually undertakes the carrying out of the activity listed in the First Schedule thereof.
Financial Institutions fall within two broad categories:
i) Financial Institutions undertaking other activities such as lending, financial leasing, the provision of guarantees and commitments, foreign exchange services and money brokering;
ii) Institutions undertaking payment services and/or the issuance of electronic money (more commonly known as ‘payment institutions’ or ‘electronic money institutions’, respectively).
Securities and Markets
- Investment Firms
- Fund Management
- Fund Administrator
- Funds
- Custodians / Depositaries
- Trading Venues
- Securitisation
- Crowdfunding
Investment firm is defined as any legal person whose regular occupation or business is the provision of one or more investment services to third parties and/or the performance of one or more investment activities on a professional basis.
These Investment Firms are licensed to operate under the Investment Services Act (Cap. 370 of the Laws of Malta).
Any scheme or arrangement which has as its object or as one of its objects the collective investment of capital acquired by means of an offer of units for subscription, sale or exchange and which has a set of characteristics as specified in the Investment Services Act.
Investment Services Providers are regulated in terms of the Investment Services Act (Cap. 370 of the Laws of Malta) and include:
i) MiFID Firms;
ii) Alternative Investment Fund Managers (AIFMs) and UCITS Management Companies, collectively referred to as Investment Managers;
iii) Custodians.
Any scheme or arrangement which has as its object or as one of its objects the collective investment of capital acquired by means of an offer of units for subscription, sale or exchange and which has a set of characteristics as specified in the Investment Services Act.
Investment Services Providers are regulated in terms of the Investment Services Act (Cap. 370 of the Laws of Malta) and include:
i) MiFID Firms;
ii) Alternative Investment Fund Managers (AIFMs) and UCITS Management Companies, collectively referred to as Investment Managers;
iii) Custodians.
Any scheme or arrangement which has as its object or as one of its objects the collective investment of capital acquired by means of an offer of units for subscription, sale or exchange and which has a set of characteristics as specified in the Investment Services Act.
Investment Services Providers are regulated in terms of the Investment Services Act (Cap. 370 of the Laws of Malta) and include:
i) MiFID Firms;
ii) Alternative Investment Fund Managers (AIFMs) and UCITS Management Companies, collectively referred to as Investment Managers;
iii) Custodians.
Any scheme or arrangement which has as its object or as one of its objects the collective investment of capital acquired by means of an offer of units for subscription, sale or exchange and which has a set of characteristics as specified in the Investment Services Act.
Investment Services Providers are regulated in terms of the Investment Services Act (Cap. 370 of the Laws of Malta) and include:
i) MiFID Firms;
ii) Alternative Investment Fund Managers (AIFMs) and UCITS Management Companies, collectively referred to as Investment Managers;
iii) Custodians.
Regulated markets are multilateral systems operated and / or managed by a market operator, which bring together or facilitate the bringing together of multiple third-party buying and selling interests in financial instruments – in the system and in accordance with its non-discretionary rules – in a way that results in a contract, in respect of the financial instruments admitted to trading under its rules and, or systems, and which is authorised and functions regularly and in accordance with Title III of MiFID.
Regulated Markets are regulated in terms of the Financial Markets Act (Cap. 345 of the Laws of Malta).
Securtisations are transactions or arrangements undertaken by securitisation vehicles, including securitisation cell companies, to issue financial instruments in order to directly or indirectly, and in whole or in part, finance the acquisition of securitisation assets from originators by any means, or the assumption of risks from originators by any means, or the granting of secured loans or other secured facilities to originators.
Securitisations regulated in terms of the Securitisation Act (Cap. 484 of the Laws of Malta).
Crowdfunding Service Provider is defined as any legal person whose regular occupation or business is matching of business funding interests of investors and project owners through the use of a crowdfunding platform.
These Crowdfunding Service Providers are licensed to operate under the European Crowdfunding Service Providers Regulation (Regulation (EU) 2020/1503 of the European Parliament and of the Council of 7 October 2020).
Insurance, Pensions and Intermediaries
- (Re) Insurance Undertakings
- Retirement Scheme Administrator
- Personal Retirement Schemes
- Occupational Retirement Schemes
- Other Service Providers - Custodian & Investment Manager
- Retirement Funds
- Insurance Intermediaries
This section applies to legal persons seeking to establish an Insurance Undertakings, a Reinsurance Undertaking or a Captives in terms of the Insurance Business Act (Cap. 403 of the Laws of Malta) (“IBA”) and pursuant to Article 7 of the IBA to carry on direct or reinsurance general business and, or long term business.
This section applies to Legal Persons seeking to obtain registration to perform duties of a Retirement Scheme Administrator in terms of the Retirement Pensions Act (Cap. 514 of the Laws of Malta).
A Personal Retirement Scheme is a scheme established for the principal purpose of providing Retirement Benefits. This section applies to Retirement Scheme Administrators seeking to establish a Personal Retirement Scheme in terms of the Retirement Pensions Act (Cap. 514 of the Laws of Malta).
An Occupational Retirement Scheme is a scheme established for the principal purpose of providing Retirement Benefits in the context of an occupational activity. This section applies to Retirement Scheme Administrators seeking to establish an Occupational Retirement Scheme to in terms of the Retirement Pensions Act (Cap. 514 of the Laws of Malta).
This section applies to legal persons seeking registration to carry out the Custody and Investment Management functions in terms of the Retirement Pensions Act (Cap. 514 of the Laws of Malta)
Retirement Funds are arrangements established for the principal purpose of holding and investing contributions made to one or more retirement schemes and/or overseas retirement schemes. This section applies to Retirement Scheme Administrators seeking to establish a Retirement fund in terms of the Retirement Pensions Act (Cap. 514 of the Laws of Malta).
Insurance Agents, Insurance Managers, Insurance Brokers, Tied Insurance Intermediaries and Ancillary Insurance Intermediaries are regulated by the Insurance Distribution Act, regulations issued thereunder, and the Insurance Distribution Rules and Conduct of Business Rules made by the MFSA.
Trusts and CSP
- Company Service Providers
- Trustee / Fiduciary Services
- Family Trustees
- Notaries acting as Qualified Persons
Company service providers are defined as natural or legal persons providing services to third parties, namely, the incorporation of companies and other legal entities, acting or arranging for another person to act as director or company secretary, and providing registered office services.
These service providers are regulated by the Company Service Providers Act.
The MFSA regulates professional trustees and other fiduciary service providers such as persons acting as mandataries and administrators of private interest foundations. These are required to be licensed and regulated in terms of the Trusts and Trustees Act.
Trustees of Family Trusts are subject to a specific registration process by the MFSA and are also regulated in terms of the Trusts and Trustees Act.
Notaries may apply for registration to be able to act as a qualified person for trustees who are not authorised by the MFSA in relation to the holding of securities or interests in or issued by a commercial partnership registered in Malta, or immovable property in Malta.
The appointment of a qualified person is regulated in terms of the Trusts and Trustees Act and a specific Legal Notice (SL 331.05) has been issued catering for the registration of notaries as qualified persons.
Virtual Financial Assets
Persons wishing to provide and exercise the functions listed under Article 7 and/or Article 14 of the VFA Act shall be required to register as a VFA Agent, through the submission of the online VFA Agent Registration Form which may be accessed by clicking below.
The Registration Form needs to be accompanied by Annexes which may be accessed through the links below.
Any person wishing to issue a VFA to the public in or from within Malta is required to draw up a whitepaper which includes the information listed in the First Schedule of the VFA Act and register said whitepaper with the MFSA.
Persons wishing to register a Whitepaper with the MFSA in accordance with the VFA Act are required to submit, through a registered VFA Agent, an online Whitepaper Registration Form. The Registration Form needs to be accompanied by Annexes which may be accessed through the links below. Whitepapers which have been successfully registered by the Authority shall subsequently be found within the Authority’s Financial Services Register.
Persons wishing to provided one or more services listed under the Second Schedule of the VFA Act in relation to such assets are required to apply for a licence through a registered VFA Agent, by submitting the online VFA Service Provider Application Form.
Beneficial Owners, Qualifying Holders, Administrators and Senior Managers of the Applicant are required to submit a PQ prior to the submission of the Application Form. The Application Form needs to be accompanied by Annexes which may be accessed through the links below.
VFA Services Provider should submit their application through a registered VFA Agent.
